All the new office space that has opened has been in Uptown though not the CBD which consists of the 1980's office towers inside the highway noose that separates our tallest buildings from the rest of town. The only stuff on the CBD side that has leased up without problems is right on Klyde Warren which this site is located near but notice Hillwood instead went with their Victory Tower office project first.

Most of all the CBD 1980's buildings and hotels for that matter have received major renovations and what's leftover has mostly been converted for new uses. There have been lots of major turnovers and projects like parks and the coming AT&T Discovery District but the fact remains our Downtown is on the edge of DFW development. Its the far southern edge. We like to think that just because we have the tallest buildings with a highway loop that means we are the center of the wheel but realistically Downtown Dallas is not. Only in the made for TV Movie version of Dallas is Downtown the center of the development wheel.

I've said before and I will say it again until the CBD is surrounded by upward moving development not just from the north will the CBD boat float higher. Deep Ellum is finally firing on all cylinders, but the Cedars is still a slow-moving train, Riverfront Blvd area has hopes but also is just a dream for now. Design District is steady but also just a side note. Uptown Victory Park is still a very productive attractive development area but the CBD is not the bride she is one of the many bride maids at the DFW wedding.

Further out you have Bishop Arts/Oak Cliff which is looking better each day and West Dallas/Trinity Groves is coming along as well too. South Dallas has some bright spots but isn't out of its slump yet. Old East Dallas has seen some of its positive growth spread in the CBD's direction as well.

You cant look at the CBD from an island perspective. Holistic improvements across the entire wider area will make the CBD work again for more intense development.

The obvious counterargument is that the nearest major markets Houston and Austin are both going gangbusters in downtowns that are also very far from the centers of their metro regions' employment growth and residential rooftops growth. Dallas was traditionally more of a real estate town than they are. Despite our consistently superior gross job numbers since Houston plunged in 2014-15, DFW's real estate investors are being less optimistic about the recovery overall than theirs or Austin's are.

The off-center business district is the excuse here, but neither those realities nor the overall jobs growth are the fundamentals responsible for the local behavior.

I've asked it before and I'll ask it again - why can't Dallas support 50 stories plus projects? I mean the area is adding 1.5M residents per decade. I acknowledge that we're spread out and the corporate / residential high-rise growth is distributed throughout DFW, particularly CBD, Frisco, Plano, Las Colinas, but still, LA is spread out and they've added a skyline changer in the last few years. Chicago is too (e.g., 101 story Vista Tower) and they're basically flat population-wise. Is land still that cheap here to where it doesn't warrant the height? All these new office buildings in the CBD have pretty much leased up within a year of opening. Anyone knowledgeable out there that can alleviate my confusion?

Ah. I was under the impression that they have been based on recent articles. That being said, 1900 Pearl sold for a pretty penny, so from the developer's POV probably a success.

Re: the uber conservative local developer mentality - is it as simple as the fallout from the 1980s over-building / crash was so scarring to the Dallas RE community that they operate super (overly?) cautiously now? I'm sure the Museum Tower debacle didn't help things. It still doesn't explain why we don't have more bolder development from non-Dallas developers, but still.

Let me be clear - our city has made gigantic strides. Samantha Brown said it best in her show, "Dallas has changed more in 5 years than most cities do in 20." We have thriving food, arts, and music scenes and multiple, truly interesting neighborhoods with development ongoing in each of them. Population trends are skyward and GDP growth is robust on top of an already sizable base.

There's just a cognitive dissonance that persists in that we've experienced all of this and are, at least projected, to experience more, but have yet to add any bold, signature buildings (outside of AMLI Fountain Place) while the rest of our peer (above and below) cities are.

jetnd87 wrote:Ah. I was under the impression that they have been based on recent articles. That being said, 1900 Pearl sold for a pretty penny, so from the developer's POV probably a success.

Re: the uber conservative local developer mentality - is it as simple as the fallout from the 1980s over-building / crash was so scarring to the Dallas RE community that they operate super (overly?) cautiously now? I'm sure the Museum Tower debacle didn't help things. It still doesn't explain why we don't have more bolder development from non-Dallas developers, but still.

Let me be clear - our city has made gigantic strides. Samantha Brown said it best in her show, "Dallas has changed more in 5 years than most cities do in 20." We have thriving food, arts, and music scenes and multiple, truly interesting neighborhoods with development ongoing in each of them. Population trends are skyward and GDP growth is robust on top of an already sizable base.

There's just a cognitive dissonance that persists in that we've experienced all of this and are, at least projected, to experience more, but have yet to add any bold, signature buildings (outside of AMLI Fountain Place) while the rest of our peer (above and below) cities are.

There really is no great mystery here. Insufficient demand for office space in such buildings. If there were sufficient demand, some developer, either Dallas-based or otherwise, would be building.

I wouldn't be disappointed one bit if every vacant block of the CBD were filled with midrise residential. Residential lease rates in the CBD are higher than the regional average and occupancy is lower than the average. Building more residential is a no-brainer, but it seems local developers are primarily geared toward lower demand/higher reward office market. Here's to hoping more regional/national deveopers fill the residential midrise void we currently have.

I hate to break it to everyone here, but "super tall" buildings are a thing of the past and I wouldn't be surprised if we never see a new 30+ story office building built again in Dallas.

In the 80s and 90s having an office in the tallest building in town was seen as a status symbol where execs could all have high floor window offices and companies would pay a premium for that space. High rises by nature offer inefficient floor plates when you have to account for so many elevators and structural design. The trend today (outside of severely land constrained markets like NYC, San Fran, etc.) is for efficient floor plates and more building amenities, common areas, outdoor space, etc. which are much easier to design and utilize in "mid-rise" buildings. On top of all that, why would equity and debt providers put all their money on the line for 1MM SF in a single building with higher costs PSF to build and significantly longer lease up timelines (more risk) when it's so much easier and smarter to do a few hundred thousand square feet at a time as the market can absorb it?

What about parking? Like it or not office tenants in Dallas still want 3/1000 parking or as close as they can get and I don't see anyone lining up to build a 3,000 space parking garage. For frame of reference, the new parking garage at Fountain Place is "only" 1,500 stalls so imagine increasing that between 33-100% for a 2-3/1000 ratio. If a site is so small it demands a high rise then there isn't room for parking and if a site has room for parking it's too big to require a high rise.

Look at all the corporate campus development here and around the country. Apple, Amazon, JP Morgan Chase, Toyota, State Farm, etc. all could have easily filled one or two monster high rise buildings that dramatically changed the skyline but elected to develop either a sprawling low rise campus or multiple mid-rise buildings because that is what office workers/tenants desire and it's more affordable.

I don't know what Hillwood is going to ultimately do on this site, and neither do they. That said, anyone holding out hope for a monster skyline changing high rise is certain to be disappointed.

muncien wrote:I wouldn't be disappointed one bit if every vacant block of the CBD were filled with midrise residential. Residential lease rates in the CBD are higher than the regional average and occupancy is lower than the average. Building more residential is a no-brainer, but it seems local developers are primarily geared toward lower demand/higher reward office market. Here's to hoping more regional/national deveopers fill the residential midrise void we currently have.

Not sure how you came to the conclusion that local developers are primarily geared toward the office market in Dallas. I believe there is currently more apartment development going on than office development in downtown Dallas, even by local developers (I am referring to actual development that has actually begun or is about to begin, not "development" such as Hillwood Urban's).

Hillwood's plan included hotel, office, & residential components. Most new supertall's have multiple aspects now. The new buildings in Downtown Los Angeles are made up of multiple kinds of tenants. I don't know if Dallas can support this kind of development.

"If a site is so small it demands a high rise then there isn't room for parking and if a site has room for parking it's too big to require a high rise."

That isn't stopping much taller buildings in Houston and Austin, even though they have much lower barriers to entry, and much smaller pools of institutional capital ready to compete for a property being sold at any given date, compared to the coastal markets.

So if it isn't that, and it isn't regional CBD-centricity, since they are off center, too -- and it isn't a bevy of mature neighborhoods on all sides of downtown, since they are not dramatically different from Dallas in that area either -- then either Houston's and Austin's more optimistic infill investments are irrational, or else we can ask whether there is a rational factor that central Dallas could introduce, but hasn't.

Either the same or something equivalent, that will play a similar role to whatever factor is allowing them to rationalize that kind of investment.

I45Tex wrote:That isn't stopping much taller buildings in Houston and Austin, even though they have much lower barriers to entry, and much smaller pools of institutional capital ready to compete for a property being sold at any given date, compared to the coastal markets.

I don't know enough about Houston to comment, but Austin has a relatively smaller Downtown area with much less available land. I do think this is a case of supply and demand and, while demand is high in Dallas, the supply of avaialble land is still pretty high so it's hard to justify something with some serious height.

I think the best chance for a CBD skyscraper would be for AT&T expanding their headquarters site - and that’s if the company is successful and decides to move a portion of their employees down here from New York. A tall mixed use building there would work if the office portion was “pre-leased”.

Barring the above, unfortunately it likely has to be a Hines, Crescent or Amli type developer more willing to do something special than our big name local developers (Hillwood, TC, etc. )...

All right, then! We just need to flood Fair Park 11 months of the year so that the Deep Ellum and Exposition Park pedestrian magnet is finally combined with a Town Lake-like limited supply of primo shoreline sites with shoreline views

eburress wrote:^ It's a very nice looking tower but now they just need to double or triple its height.

Actually, I think it is nice and if you look closely its not that much shorter than AMLI Fountain Place which means in terms of overall height would't come in that bad. The only way Dallas would get something taller would be mixed use, maybe a hotel on the upper floors that could add an extra 15 floors or so but Hillwood doesn't seem inclined to do mixed use.

rono3849 wrote:Hillwood's plan included hotel, office, & residential components. Most new supertall's have multiple aspects now. The new buildings in Downtown Los Angeles are made up of multiple kinds of tenants. I don't know if Dallas can support this kind of development.

This is already a thing here tho. We're seeing that multi faceted approach with 1401 ElM and even the Union. I think one of the reasons you don't see this here is height restrictions. If Uptown didn't have the height restrictions, I'm sure we'd have one by now. However, these types of developments are not happening in downtown. I think that's more a reflection of downtown than anything else. The CBD simply hasn't been seeing a lot of demand for new office.

At the right location in the CBD, like near KWP, I think it would work. The new office building on Pearl on the CBD side that sold for a record amount per sq ft could have been mixed use and taller. Might have been a challenging site for it but that’s what we’re talking about.

Another example is the Hall development in the Arts District. Nice hotel, nice office building, very nice condos, large underground parking garage already in place - but all separate conservatively sized buildings. The office building has done well too. Could have combined 2 or more of these into something taller with more room left for future development, but Hall decided on the conservative approach.

mhainli wrote:At the right location in the CBD, like near KWP, I think it would work. The new office building on Pearl on the CBD side that sold for a record amount per sq ft could have been mixed use and taller. Might have been a challenging site for it but that’s what we’re talking about.

Another example is the Hall development in the Arts District. Nice hotel, nice office building, very nice condos, large underground parking garage already in place - but all separate conservatively sized buildings. The office building has done well too. Could have combined 2 or more of these into something taller with more room left for future development, but Hall decided on the conservative approach.

Didn't Hall try to find a market for taller buildings on his site for many years, indeed decades, to no avail?

rono3849 wrote:Hillwood's plan included hotel, office, & residential components. Most new supertall's have multiple aspects now. The new buildings in Downtown Los Angeles are made up of multiple kinds of tenants. I don't know if Dallas can support this kind of development.

This is already a thing here tho. We're seeing that multi faceted approach with 1401 ElM and even the Union. I think one of the reasons you don't see this here is height restrictions. If Uptown didn't have the height restrictions, I'm sure we'd have one by now. However, these types of developments are not happening in downtown. I think that's more a reflection of downtown than anything else. The CBD simply hasn't been seeing a lot of demand for new office.

But literally across the street (i345) from downtown the demand for office high rises is booming. Regardless of whether i345 is torn down, you better believe the definition of CBD does include (or will include) projects like Epic. We are absolutely splitting hairs and engaging in mental gymnastics if we think the average person in suburbia defines "Downtown Dallas" by the perimeter of 35e/woodall rogers/30/i345.

On top of that, the developers of East Quarter are also proving the thesis that there isn't demand for office space downtown wrong. I walked past many buildings on Commerce St that are part of this development and most appeared to be leased or in the process of being leased.

Even if it was true that in the greater Dallas area there isn't as much demand for office space right now vis a vie other areas (a statement I disagree with, by the way) - there is no denying that there are many cranes in the Downtown skyline building residential projects whereas 10 years ago I couldn't count a single crane.

I would think that most people posting on an Urban Development forum would agree that smart development - that is, concentrating growth in urban areas as opposed to sprawl - is preferable.

rono3849 wrote:Hillwood's plan included hotel, office, & residential components. Most new supertall's have multiple aspects now. The new buildings in Downtown Los Angeles are made up of multiple kinds of tenants. I don't know if Dallas can support this kind of development.

This is already a thing here tho. We're seeing that multi faceted approach with 1401 ElM and even the Union. I think one of the reasons you don't see this here is height restrictions. If Uptown didn't have the height restrictions, I'm sure we'd have one by now. However, these types of developments are not happening in downtown. I think that's more a reflection of downtown than anything else. The CBD simply hasn't been seeing a lot of demand for new office.

But literally across the street (i345) from downtown the demand for office high rises is booming. Regardless of whether i345 is torn down, you better believe the definition of CBD does include (or will include) projects like Epic. We are absolutely splitting hairs and engaging in mental gymnastics if we think the average person in suburbia defines "Downtown Dallas" by the perimeter of 35e/woodall rogers/30/i345.

On top of that, the developers of East Quarter are also proving the thesis that there isn't demand for office space downtown wrong. I walked past many buildings on Commerce St that are part of this development and most appeared to be leased or in the process of being leased.

I don't recall anyone positing a thesis that there is no demand for office space downtown. Clearly there is some demand for office space, including some demand for new office space downtown.

rono3849 wrote:Hillwood's plan included hotel, office, & residential components. Most new supertall's have multiple aspects now. The new buildings in Downtown Los Angeles are made up of multiple kinds of tenants. I don't know if Dallas can support this kind of development.

mhainli wrote:At the right location in the CBD, like near KWP, I think it would work. The new office building on Pearl on the CBD side that sold for a record amount per sq ft could have been mixed use and taller. Might have been a challenging site for it but that’s what we’re talking about.

Another example is the Hall development in the Arts District. Nice hotel, nice office building, very nice condos, large underground parking garage already in place - but all separate conservatively sized buildings. The office building has done well too. Could have combined 2 or more of these into something taller with more room left for future development, but Hall decided on the conservative approach.

Didn't Hall try to find a market for taller buildings on his site for many years, indeed decades, to no avail?

Maybe single use taller buildings but has Hall ever done a mixed use tower? My point is that their site in the Arts District could have supported mixed use because that’s what they built in 3 separate towers. If office floor plate size is an issue then the above hotel or condo floor plates in the tall tower could be stepped back and made smaller.

CRE_Investor wrote:I hate to break it to everyone here, but "super tall" buildings are a thing of the past and I wouldn't be surprised if we never see a new 30+ story office building built again in Dallas. .

and I wouldn’t be surprised if we see atleast one 30+ story office building break ground in the downtown area within the next two years. To say it may never happen again is a bit extreme. When this metropolitan area surpasses 10+ million people there will inevitably be a need to build vertically. Even if it’s not at the pace we saw in the 80s.

IF they can drum up enough demand for being the old center of the city.

The demand for office space is still pretty far north and Frisco and Plano are willing to give away the farm for any big company that comes knocking. I am a cheerleader about Downtown and the CBD but realistically you have to look at where development is focusing and developers follow where clients want them. KDC keeps opportunities open in the CBD for example but a bet right now on Plano and Frisco is a sure bet even if its under 10 stories. The CBD is still a fairy tale.

Regarding the issue of suburban vs urban office space demand, I actually did a project about a year ago tracking the quarterly office stats for the largest 20 cities and sad to report Dallas ranks pretty poorly on most metrics. Even compared to other sunbelt cities that have a large portion of their office market in the suburbs, most others are seeing shifts to where a large share of new construction or net absorption has shifted back to their downtowns but doesn't seem to have occured in Dallas yet (if at all).

Alpaca_Obsessor wrote:Regarding the issue of suburban vs urban office space demand, I actually did a project about a year ago tracking the quarterly office stats for the largest 20 cities and sad to report Dallas ranks pretty poorly on most metrics. Even compared to other sunbelt cities that have a large portion of their office market in the suburbs, most others are seeing shifts to where a large share of new construction or net absorption has shifted back to their downtowns but doesn't seem to have occured in Dallas yet (if at all).

Interesting. Thanks for sharing. A couple questions:

1) What is the source for your numbers?2) How did you define urban/suburban?

Honestly, I am not surprised when you look past the cheerleading Downtown Dallas continues to limp along. Now that Headington is abandoning a large portion of Main Street I wonder if his property near this Hillwood Site will be up on the chopping block to try to recoup some losses or if he will hold on to it for an even longer-term investment. I imagine Hillwood will update this site's proposal every couple of years until something sticks.

I actually think the lack of vision in the Hillwood organization has resulted in this development's floundering for years. It's adjacent to Harwood's massive growth, which is just across the the freeway. AMLI has just built a 45 story residential tower in the next block and the Field Street development is across the street. Frankly, Ross Perot Jr needs a new organization to push this site. 25 stories of hotel, 25 stories of residential, & 25 stories of office. They can do it in LA, they can do it in Dallas.

Hillwood doesn't have a great track record with urban things, probably why they're so conservative. As much as Victory Park has improved, they really built it with a poor pedestrian experience in mind. I guess where I'm going with this...I wouldn't hold my breathe for Hillwood picking a good interactive design should they ever build this. Just a fortress office tower.

Yes, and Hillwood has been more focused on Fort Worth Alliance which they have been the most successful with for decades now. There Hillwood Urban projects have always been just cute, not remarkable. With Victory Park, they attempted to do the big thing and failed miserably. I think the company just doesn't have urban development in its DNA as much as they want it to be true.

Remember that Hillwood was originally a warehouse/industrial developer. Likely why they started Alliance and have been successful with it. With the exception of Victory most everything else has been safer plays.

Tnexster wrote:I wonder what this current reality will mean for Hillwood's plan for this property. Maybe they will be forced to be more creative in their thinking.

Ross Perot Jr. doesn't appear to have that kind of mindset. He's very traditional in his thinking. If I were him, I'd build the round tower. 35 stories would be hotel, 25 stories would be condo/apartments, 18 stories would be office, & top 2 would be observation with restaurant/bar dining. That would give him 80 stories. If he were to go to 72, subtract accordingly from the suggested line up.

Perot.Dallas.Round.Tower.jpg

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That round tower was Hillwood’s first (or second?) conceptual iteration - by far the best AND most unlikely to be built. Rono3859 has a great idea to make it mixed-use, but Hillwood is too conservative to take on such a project. Their original stated use for it was all office, which require a substantial lease before construction. Since that concept at least 2 other smaller and more conservative office building designs have been put out there. I hope they sell the land to somebody else.

Tnexster wrote:I wonder what this current reality will mean for Hillwood's plan for this property. Maybe they will be forced to be more creative in their thinking.

Ross Perot Jr. doesn't appear to have that kind of mindset. He's very traditional in his thinking. If I were him, I'd build the round tower. 35 stories would be hotel, 25 stories would be condo/apartments, 18 stories would be office, & top 2 would be observation with restaurant/bar dining. That would give him 80 stories. If he were to go to 72, subtract accordingly from the suggested line up.

Perot.Dallas.Round.Tower.jpg

I agree completely with mixed use and I also agree it's not in Hillwoods DNA. This particular location so close to the museum and KWP/Uptown almost commands something mixed use and multi-purpose but we just have the wrong developer for that kind of project.

A supertall would have been nice, but I'm happy for anything taller than Museum Tower getting built. I just hope it's visually interesting. This and the Field st district will serve as the visual bookends of that side of downtown for anyone at Klyde Warren.

No proposed start date for the construction on there, wondering how feasible this is to actually happening with the current climate right now.. Did notice driving by the other day a new Hillwood flag was set up on the site